Use the information below to answer the following questions.
Fact 11.5.1
An economy has a consumption function of C = 10 + 0.8Y, investment equal to 6, government expenditure equal to 10, exports equal to 10, and an import function of M = 0.1Y.
-Refer to Fact 11.5.1.What is the equation for the aggregate expenditure curve for this economy?
A)AE = 26 + 0.8Y
B)AE = 16 + 0.7Y
C)AE = 36 + 0.7Y
D)AE = 36 - 0.7Y
E)AE = 36 + 0.9Y

Question

Quizplus · Accepted Answer

Aggregate expenditure (AE) is given by the sum of consumption, investment, government expenditure, and net exports (exports - imports). 
AE = C + I + G + (X - M) 
AE = (10 + 0.8Y) + 6 + 10 + (10 - 0.1Y) 
AE = 36 + 0.7Y

Use the Information Below to Answer the Following Questions